Economics Answers

How is possible for a government to have taxes for much higher value than money in circulation in economy.?kenya collects taxes worth 1.3trillion yet the money in circulation is 300 billion

The basic model of supplier-induced demand suggests that an increase in the number of physicians leads to an________, which leads to _________.

a.increase in demand; an increase in supply.

b.increase in demand; a decrease in supply.

c.increase in supply; an increase in demand.

d.increase in supply; a decrease in demand.

A supply curve for hospital beds is upward sloping because

a. mass production is associated with larger levels of output

b.consumers want to see a positive relationship between price and quantity

c.beyond some point the cost of producing additional hospital beds will rise

d.expanding output requires using qualitatively inferior inputs

Use examples to explain the absolute advantage in international trade.your answer must have references.

Total profit is maximised where:

A. TR equals TC B. TR and TC curves are parallel C. TR and TC curves are parallel and TC exceeds TR D. TR and TC curves are parallel and TR exceeds TC E. none

Anya is awake for 100 hours per week. Using one diagram, show Anya’s budget constraints if she earns $12 per hour, $16 per hour, and $20 per hour. Now draw indifference curves such that Anya’s labor-supply curve is upward-sloping when the wage is between $12 and $16 per hour and backward-sloping when the wage is between $16 and $20 per hour.

The price of cheese rises from $6 to $10 per pound, while the price of wine
remains $3 per glass. For a consumer with a constant income of $3,000, show















what happens to consumption of wine and cheese. Decompose the change into income and substitution effects

In the decades after World War II, the world’s two superpowers— the United States and the Soviet Union—were engaged in a prolonged competition over military power. This topic motivated some of the early work on game theory. The game theorists pointed out that an arms race is much like the prisoners’ dilemma. Explain why?

Wheat is produced under perfectly competitive conditions. Individual wheat farmers have U-shaped, long-run average cost curves that reach a minimum average cost of $3 per bushel when 1,000 bushels are produced.

c) Given the new demand curve described in part (b), what will be the new long- run equilibrium? (That is, calculate market price, quantity of wheat produced, and the new equilibrium number of farms in this new situation

Wheat is produced under perfectly competitive conditions. Individual wheat farmers have U-shaped, long-run average cost curves that reach a minimum average cost of $3 per bushel when 1,000 bushels are produced.

b) Suppose demand shifts outward to QD = 3,200,000 - 200,000P. If farmers cannot adjust their output in the short run, what will market price be with this new demand curve? What will the profits of the typical farm be?